Malaysia’s Khazanah announces $1.57b domestic investments to boost local economy

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Malaysian sovereign investment fund Khazanah Nasional Bhd has announced an additional domestic investment of MYR6.77 billion ($1.57 billion), to support the government’s initiatives to stimulate the country’s economy.

In line with Khazanah’s role as the strategic investment fund of the country, the fund will be supporting the proactive economic measures in all relevant areas, the fund said, in a press statement.

Prime Minister Mohd Najib Abdul Razak announced earlier on Monday several proactive measures to strengthen the country’s economic fundamentals and address the impact of financial turbulence in the global markets on Malaysia’s economy.

To that, Khazanah said, it will accelerate and increase domestic investments over the immediate and medium term in several key sectors.

“These sectors and investments have been selected on the basis of those that provide higher domestic economic multipliers, boost job creation, support local content, increase prospects for foreign exchange receipts, and enhance public goods and inclusiveness for (Malaysians). These include the leisure and tourism, healthcare and health tourism, export-oriented creative industries, innovation and technology and Business Process Outsourcing (BPO) sectors,” Khazanah said in its press statement.

The investments with a total value of MYR6.77 billion include Desaru Coast Destination Resort, an integrated leisure and tourism resort in Desaru, Johor, with a development cost of approximately MYR4.5 billion between now and 2017 to 2022.

A new Tourism Venture Fund of MYR50 million for qualified tourism entrepreneurs in the sub sectors of eco-tourism and cultural/heritage tourism will also be set up, while there will also be new hospitals and extension of existing hospitals under IHH Healthcare Bhd costing approximately MYR670 million between 2015 and 2017 in Medini, Iskandar; Kuala Lumpur, Klang, Melaka, and Kota Kinabalu.

A new in-patient rehabilitation hospital business will be in place, with investment totaling approximately MYR100 million over the next two years until 2017, together with a foreign technical operator and equity partner to bring in global best practices.

Khazanah will also invest in the development of Dataran Muzium and Tugu Park at an estimated development cost of MYR1.1 billion between 2016 and 2018 to 2020, with Khazanah funding approximately MYR730 million of the cost. The projects are a not-for-profit contribution to public spaces and are expected to be completed between 2018 and 2020.

In the creative industries, Sonneratia Capital will be set up with a MYR50 million co-investments fund to finance production of local content for the export markets. Sonneratia Capital expects to see the release of films in various regional markets starting from the end of 2015.

In Iskandar Malaysia, i2M Sdn Bhd, a 100 per cent subsidiary of Khazanah, will accelerate an investment of MYR90 million to attract a targeted MYR2.2 billion of additional foreign investment by 2020 in the BPO sector.

An additional MYR115 million will be channeled into the domestic innovation and technology sector across several initiatives including the creation of physical innovation and accelerator space; startup bootcamps; angel matching co-investments in early-stage companies; and seed-stage venture capital funding for the IT and non-IT sectors, respectively.

In line with the government’s call to increase the Skim Latihan 1Malaysia (SL1M) programme allocation from 10,000 to 15,000 participants in 2015 (from the overall SL1M programme total of 4,500 participants in 2014), Khazanah is also committed to more than double its existing commitment from 1,330 to 3,800 participants, at an estimated total cost of MYR95 million per annum.

The projects and initiatives are over and above Khazanah’s existing commitments and investments through its various subsidiaries, major investee companies, and investment programs, including those under major investee companies such as Tenaga Nasional Bhd, TM Bhd, CIMB Bhd, Axiata Bhd, UEM Group Bhd, Malaysia Airports Holdings Bhd, Malaysia Airline Bhd, ValueCap Bhd and Iskandar Investment Bhd.

The investments, to be delivered by Khazanah through relevant investee companies and development partners have received or are in advanced stages of receiving the necessary approvals, and are already in various stages of implementation or are ready to be implemented imminently.

CIMB Group chief executive officer Zafrul Aziz responded to the announcements favourably, applauding the economic stimulus measures announced today to stabilise the financial markets and support business activities.

The measures outlined are well-balanced between supporting the financial market with the MYR20 billion capital injection into ValueCap to buy the undervalued shares and measures to support real economic activities, such as incentives for manufacturers, the SMEs and tourism activities,” he said in emailed comments.

He noted that Malaysia’s economic growth is already envisaged to be well above the lower end of the official target of 4.5 per cent for this year, even with the headwinds emanating from low commodity prices, sharp weakening in the Malaysian Ringgit, China’s economic slowdown and the uncertainties on the global front.

“Hence, we are confident that if all the measures announced are executed well, growth could actually be closer to the upper end of the official target of 5.5 per cent although there may be some time lag before we can see the full positive effects working through the financial and capital markets and in turn, the real economy,” he said.

CIMB Group also welcomed the government’s continuous commitment in consolidating its fiscal account and its efforts to contain the deficit target of 3.2 per cent of Malaysia’s gross domestic product for this year.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.